'Indian gaming industry may rack up $513 mn by CY22 end'

Indian gaming industry is in the process to raise $513 million (around Rs 4,000 crore) by the end of this calendar year, according to a report.

The sector has witnessed a funding jump of 380% from 2019 and by 23% from 2020, gaming-focussed venture firm Lumikai says in its new report, State of India Gaming FY22.

The report surveyed across 2,240 respondents, third-party data providers, industry leaders and Lumikai’s proprietary insights, further highlights that Web3 has emerged as the most popular technology in games with 30% of 450 Indian Web3 firms operating in gaming. The space has secured $400 million in 2019-22. 

Web3 or Web3.0 generally means the next generation of the worldwide web. It is derived largely on blockchain technologies, which use a distributed network of servers and devices across which any data and service is hosted.   

“India’s gaming industry this year hit major inflection points, registering strong growth across the board. India crossed half a billion gamers in FY22, up from 450 million in the previous year. Industry growth is expected to be fuelled by a rapidly increasing gamer base, higher conversion to paid users, and increasing sophistication of Indian gamers,” said Justin Shriram Keeling, founding general partner, Lumikai.  

"The last 28 months have been watershed years in terms of attracting VC investment of over $2.6 billion in the Indian gaming landscape. Sustained capital investment and liquidity outcomes in the form of strategic exits valuing over $750 million, multiple unicorns, and a publicly traded company have heightened the interests of entrepreneurs and investors alike,” added Salone Sehgal, Lumikai’s another founding general partner.  

The findings further showed that at least 120 million, or one fourth, of the total 507 million gamers in India, are paid users.  

In FY22, mid-core games like BGMI and Free Fire were the fastest growing gaming category logging 32% growth, combined with gross revenue of $550 million. For 48%, they have spent on mid-core games, whereas 65% paid gamers claimed to have engaged in in-app purchases at least once.

The report also said that 80% of gamers have expressed their interests on games based on Indian intellectual property.

It further added that India has also seen a rise in female gamers, with 60:40 ratio (male: female), equally split between metro and non-metro cities.

Lumikai was co-founded in 2020 by Keeling and Sehgal. The fund has so far invested in nine gaming companies including All Star Games, Eloelo, Crater, Studio Sirah, CloudFeather Games, Bombay Play and Loco.

In an interaction with VCCircle last month, Sehgal said that the firm sees opportunities to create category leaders across the domestic gaming landscape spanning from content and platform to tools/infrastructure and frontier tech like Web 3.0 in India.